THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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WOLF BLITZER, CNN ANCHOR: Punishing Putin. The U.S. and its allies threaten Russia's president with more sanctions, accusing him of continuing aggression in Ukraine. Will Putin lash out instead of backing down?

Great escape. A massive manhunt under way for two vicious murderers who could be anywhere nearly three days after their daring prison escape. Tonight, new information about a possible accomplice on the inside.

And the TSA fails again. The agency in charge of airport security misses dozens of employees on terror watch lists, allowing them to work in secure areas. How are the red flags missed?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: The breaking news, new information about the woman who's being questioned today as a possible accomplice of a daring prison break in New York State. An official tells CNN she's a prison employee who worked with the two escaped murderers, tailoring clothing and knew them well. We're following the international 24/7 manhunt for the convicts who used power tools to cut through the walls of their cells and flee through a maze of underground pipes. Stand by for more on this story.

Also breaking, a startling admission by President Obama about the U.S. war against ISIS. Speaking at the G7 summit, he acknowledged he doesn't have a complete strategy for training Iraqi forces to fight the terrorists. I will talk about that and more with Senator Chris Murphy. He's a member of the Senate Foreign Relations Committee. Our correspondents and analysts are also standing by, as we cover all the news breaking now.

First, let's go to our senior White House correspondent, Jim Acosta. He's at the site of the G7 summit in Europe.

So what happened, Jim?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, President Obama acknowledged more than nine months into the battle against ISIS and after some recent setbacks, he is retooling his approach for defeating the terrorist group after a quick trip to the spectacular Bavarian Alps to huddle with other world leaders gathered here. The president revealed he is revising what has been the cornerstone of his strategy.

That is training Iraqi forces to fight ISIS militants on the ground. In a remark the president's critics seized on, Mr. Obama said he is still in search of what he called a complete strategy for training. Here's what he had to say.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We don't yet have a complete strategy, because it requires commitments on the part of the Iraqis as well about how recruitment takes place, how that training takes place. And so the details of that are not yet worked out.

(END VIDEO CLIP)

ACOSTA: Now the president admitted that even as the Pentagon is drawing up a plan to boost training for Iraqi troops, the government in Baghdad is having trouble finding new fighters.

And we should point out Republican critics are pouncing on the president's remarks. House Homeland Security Chairman Michael McCaul said what was surprising today was that the president admitted he didn't have a strategy and the remarks are a reminder of what the president said nine months ago. Wolf, you will remember them well. That was when he said he did not have a strategy for dealing with ISIS in Syria -- Wolf.

BLITZER: And there was an awkward moment during the summit, the leaders gathering there with the Iraqi prime minister, Haider al- Abadi. He came right next to the president, sat down next to the president. Pick up what happened then.

ACOSTA: Right, it was strange.

Iraqi Prime Minister Haider al-Abadi traveled all the way to the Alps to ask the world leaders for more military assistance. And there was this awkward moment earlier today when it seemed he could not get the president's attention. The president was apparently deeply engrossed in his conversation with other leaders at this summit and did not realize that the Iraqi prime minister was right behind him.

I think we should point out, this does not appear to be a snub. Abadi, remember, is the man the president wanted as prime minister of Iraq and later the president told Prime Minister Abadi during their bilateral meeting that more support is coming for the Iraqis and he pledged that ISIS will be defeated. But no question about it, it was a strange moment, Wolf.

BLITZER: Certainly was. All right, Jim, thank you.

Let's get to another dangerous thorn in the president's side as he met with the G7 allies. That would be the Russian leader, Vladimir Putin. The president delivered new warnings about Putin's meddling in the bloody warfare in Eastern Ukraine, although so far, the threats, the sanctions, they haven't ended the fighting yet by any means.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, Wolf, there's the talk of possibility of new sanctions, but this summit of G7 leaders produced no new penalties or new policy against Russia. The president made clear today that the new possible sanctions he mentioned are still being discussed just at the technical level.

Western leaders have made no political decision to implement them.

(BEGIN VIDEOTAPE)

SCIUTTO (voice-over): This is what a cease-fire looks like on the ground in Eastern Ukraine, Russian-backed forces in close combat with the Ukrainian army. With cracks in the Minsk agreement designed to end the fighting, today, G7 allies reiterated their unity in defense of Kiev, President Obama warning of possible new penalties on Moscow.

[18:05:11]

OBAMA: The G7 is making it clear that, if necessary, we stand ready to impose additional significant sanctions against Russia. We will continue to seek a diplomatic solution.

SCIUTTO: But any diplomatic resolution remains hampered by diametrically opposed facts on the ground. This weekend, Russian President Vladimir Putin insisted the West has nothing to fear of Russia and once again denied any Russian troops inside Ukraine. Today, President Obama countered.

OBAMA: As we have seen again in recent days, Russian forces continue to operate in Eastern Ukraine, violating Ukraine's sovereignty and territorial integrity. This is now the second year in a row that the G7 has met without Russia, another example of Russia's isolation.

SCIUTTO: But it is also the second year of Russia's occupation of Crimea and parts of Eastern Ukraine, raising the question, is the West's policy failing?

MICHAEL SINGH, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: The sanctions have had a big impact on the Russian economy, but they haven't changed Putin's calculus. And I think we can't rely on sanctions alone.

SCIUTTO: U.S. troops are now training the Ukrainian military in Western Ukraine. Many observers fear Russian attempts to fray the Western coalition. Uninvited to the G7 summit, President Putin will travel to Italy this week to meet Prime Minister Matteo Renzi, the only G7 leader silent in criticism of Moscow at the summit.

And after Secretary of State John Kerry met with Putin in Sochi last month, some are even questioning American resolve.

(END VIDEOTAPE)

SCIUTTO: So let's look at the map to see what effect the West's policy has had on Russia's operations in Eastern Ukraine in the last year. This is August of 2014, the red areas here controlled by Russia, down here at the Black Sea as well, Ukraine still controlling the green areas of the border here with Russia.

Let's fast-forward 10 months to today. Russia's controlled areas now expanding here, connecting those areas down to the Black Sea. And these are Russian forces inside Ukraine. This is about where MH17 went down last year, so Russia expanding its influence in the region over the course of the last year. And, of course, no one talks about Crimea anymore, but Crimea has also been under control now for more than a year.

So, the president talks a lot, Wolf, about raising costs on the Russian economy. That has definitely happened. The calculus on the ground though has not changed. In fact, it's gotten worse.

BLITZER: So, basically, on what the president says, all the pain that the Russian economy has endured, certainly hasn't been translated into any real action as far as Ukraine is concerned.

SCIUTTO: No, no real action on the ground, no change in the map. In fact, the map has gotten worse, and not just Russian-controlled areas, but the parts of the border that used to be controlled by Ukraine now controlled by Russia makes it a lot easier to get those Russian weapons across the border and back and forth.

BLITZER: All right, Jim Sciutto, thanks very much.

I want to get to some other breaking news we're following right now. Authorities are questioning a woman who worked at a prison in Upstate New York where a pair of murderers pull off a daring escape.

Let's get some more now.

Our national correspondent, Jason Carroll, is on the scene in Dannemora in Upstate New York, not far from the Canadian border.

What is the very latest as far as this woman is concerned, Jason?

JASON CARROLL, CNN NATIONAL CORRESPONDENT: Well, she's definitely a person of concern. This is a woman who has been questioned by authorities. She worked very closely with Richard Matt and David Sweat, knew them very well, worked with them tailoring clothes inside the prison.

Unclear what type of help she may have provided to these two men. But what is clear to investigators, Wolf, is that these men at the very least had help from the inside. (BEGIN VIDEOTAPE)

CARROLL (voice-over): Tonight, a female prison workers is being questioned as an accomplice, with a "Shawshank Redemption"-style escape of two murderers from an Upstate New York maximum security prison.

GOV. ANDREW CUOMO (D), NEW YORK: They needed equipment that they wouldn't have had. And they had to have the assistance of someone.

CARROLL: Tonight, a massive manhunt is under way for the escapees.

CUOMO: These are dangerous people, and they're nothing to be trifled with.

CARROLL: Thirty-five-year-old David Sweat serving life without parole for the killing of a police officer in 2002, and his accomplice, 49-year-old Richard Matt, who is serving 25 years to life for beating, killing, and dismembering his boss.

New York Governor Andrew Cuomo toured the escape route discovered around 5:30 Saturday morning. After stuffing makeshift dummies into their beds, so the guards thought they were sleeping, the inmates apparently got access to power tools to cut a hole in their cell.

CUOMO: Much have kept you awake with all that cutting, huh?

CARROLL: Cutting through solid steel, they exited on to a catwalk. From a catwalk, they shimmied down a tunnel below. Once there, they broke through a 24-inch brick wall, then cut through a 24- inch steel peep, which they crawled through.

They then they cut although hole into the city sewer. When they reached a manhole outside the prison wall, they cut through its steel lock and chain, finally disappearing into the neighborhood about a block away from the prison, but not before leaving behind this Post-it note with the message, "Have a nice day."

(END VIDEOTAPE)

[18:10:26]

CARROLL: Both these men were actually housed in a so-called honor block, Wolf. This is a place inside the prison where inmates who have good behavior are allowed to be housed.

They have extra resources inside this particular part of the prison. They have access to washers and dryers, TV privileges. And because these two men worked with this woman tailoring clothes, and because they also had access to washers and dryers, investigators have to work on the theory that, once they were on the outside, they probably changed their clothes and changed their appearances -- Wolf.

BLITZER: And they presumably could get away. How's the community over there in Upstate New York, Jason, reacting to all of this?

CARROLL: Well, I spoke to one woman just earlier this afternoon. We caught her as she was getting her baby and putting him back inside the house.

And she said her house was searched on Friday -- excuse me -- on Saturday, searched her garage, searched her home as well. Investigators came by. And I asked her, I said, do you feel safe? Do you feel unsafe? And she said, a lot of people thought we were crazy moving so close to a prison. She said, I actually feel safer now than I did before because so many people have been by here, so many law enforcement in the area.

She does not believe these two men are in the area at this point. She says she feels safer now than before, but still very tense for a lot of other people who are here in this community -- Wolf.

BLITZER: I can only imagine. Thanks very much, Jason Carroll.

Let's bring in the former FBI Assistant Director Tom Fuentes. He's our CNN law enforcement analyst, along with Cedric Alexander of the National Organization of Black Law Enforcement Executives. He's also a CNN law enforcement analyst. And Matthew Horace, he's a former ATF special agent in charge.

Guys, thanks very much for joining us.

Matthew, how worried should the community there in Upstate New York be right now?

MATTHEW HORACE, FORMER ATF AGENT: Well, I think they should be very worried on several levels.

Number one, this was a failure and a compromise in the security systems on so many different levels. At the strategic level, prison management, they're supposed to be policies in the place to avoid this. At the tactical level, what guard or what employee or what contractor was involved?

At ATF, and I'm sure at the FBI, we consider these people to be the worst of the worst. So the community should be concerned about their escape and also if this can happen in the future.

BLITZER: You have no doubt these two murderers, these prisoners, had outside help?

HORACE: This was an inside job and an outside job. How did they get information about the architecture of the prison and where did they go and who took them where once they got out of the...

BLITZER: Tom Fuentes, do you agree?

TOM FUENTES, CNN CONTRIBUTOR: Oh, completely.

I think because they had to have help with getting the tools and getting the layout of the underground part of that prison, and then on the outside, you don't see just a sudden escape where they run out the door and they're in the woods. This looks like that it was planned, they had somebody pick them up, probably bring money, a vehicle, clothing, all set.

And that's why, by the time this missing escape was discovered in the morning, they could have been halfway to Chicago, they could have been in Canada, they could be halfway to Mexico. They had a long time for a head start.

BLITZER: Because they got these power tools in their cells, battery-operated power tools. That's not an easy thing to do in a maximum security prison, Tom.

FUENTES: No, that's true. We don't know how they got that. And so you have this major investigation at the prison. How did this happen? Internally, who did what at the prison in terms of the employees and the contractors? But, as importantly, if not more important, right now is, what's going on, on the outside? Because every member of the public that might come across them is in danger.

BLITZER: And, Matthew -- actually, I want to go to Cedric.

Cedric, when you take a look at how close this prison is to Canada, presumably, they could have snuck across that border, right?

CEDRIC ALEXANDER, CNN LAW ENFORCEMENT ANALYST: Very easily, and certainly within a short amount of time too.

If you look at the well execution of this plan, it appears -- it has all appearances to be very well planned and executed. To be able to have the schematics, it also appears, of that prison, to be able to move through walls and up and down the interior out into a main street, it wouldn't be -- surprise any of us, I don't think, if there was a car or some vehicle waiting to take them wherever they needed to go, and also would have access to give them what they need to take off from there.

So they very well could be in Canada. They could be anywhere on the face of the planet, to be quite honest with you, in the amount of time that they have been gone. But I'm more than confident, however, that New York State Police and all the federal agencies that are involved, they're going to find these guys. It's just a matter of time.

BLITZER: Well, hopefully, when they -- they find them before these guys do any more awful, awful things.

I want all of you to stand by. We're just getting some more information into THE SITUATION ROOM right now on what's going on.

[18:15:05]

Much more on this escape from prison when we come back.

(COMMERCIAL BREAK)

[18:20:02]

BLITZER: We're learning more about the two killers who escaped from a prison in Upstate New York, including their violent and disturbing criminal records.

Our experts, they are still standing by.

But let's go to our Brian Todd. He's getting new information.

What are you learning, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight, very disturbing new details about these two men.

One detective who worked on a murder case involving escapee Richard Matt told CNN he would not be surprised if Matt was more involved in the escape than his cohort, David Sweat.

Here's what we know about Richard Matt, 49 years old. He's serving 25 years to life, convicted of kidnapping and beating a man to death. His front teeth are metal, the result of getting his teeth knocked out by prison guards in Mexico. He's got distinguishing tattoos, a Marine insignia logo on his right shoulder, heart-shaped tattoos on his left shoulder and on his chest.

David Sweat, here's what we know about David Sweat, 35 years old, serving life without parole, convicted of first-degree murder in the 2002 killing of Kevin Tarsia, a sheriff's deputy in Broome County, New York. We have distinguishing tattoos for David Sweat. He's got the one saying "Rebel" on his left arm and the letters "IFB" on his right hand.

Going back, Wolf, to Richard Matt, he's a very interesting case. He's considered maybe the more vicious, the more violent of the two. Detectives who have worked on his cases have had some very interesting things to say about him. One of them said he's seen him break his own collarbone and not seek medical treatment, that he's basically impervious to pain, and he that really is a psychotic.

So his history especially, according to the detectives who worked on his -- that murder case that he was convicted in, that he's serving this sentence for, this 1997 murder case, say that he is especially a dangerous man, Wolf.

BLITZER: Which raises the question, are those detectives who worked on these two men's cases possibly in danger tonight?

TODD: They could be, Wolf. One of the detectives told me over the phone a short time ago he was contacted by police to let them know that Richard Matt had escaped.

Another detective who worked on that same 1997 murder case told "The New York Times" he is prepared to defend himself if Richard Matt comes after him. We talked to Arnett Gaston, former chief of Rikers Island, that prison, notorious prison in New York. He said that a lot of the time when these guys get out, it's payback they want, and they want to go after the guys who put them there. So the detectives who worked on that case could be in some danger tonight, Wolf.

BLITZER: All right, thanks very much, Brian Todd, for that.

Let's bring back our experts to discuss all these new developments.

Cedric Alexander, quickly to you. We're being seen right now throughout the United States, Canada, Mexico, throughout North America right now. If somebody out there suspects that they're spotting -- they have spotted one or both of these convicted killers, what should they do?

ALEXANDER: Immediately, immediately, Wolf, they need to get on the phone to their local authorities, whether in this country or abroad, and notify them and just tell them they think they may have identified and they think these subjects may be within their sights.

The sooner we're able to get them off the streets, wherever they may happen to be, the better for everyone that's involved.

BLITZER: But, Matthew, people should not approach these two guys by any means, right?

HORACE: Under no uncertain circumstances should people like this be approached. Dial 911. Tell them what you think you see. As a matter of fact, with these kind of individuals, I would be careful even looking at them twice, because you have got to think, they're fugitives from justice, they know that we're looking at for them, and they're paying attention to what everyone does around them.

And I would just be really concerned that they need to commit other crimes to sustain their run.

BLITZER: Because these two guys, Tom Fuentes, and you have dealt with psychotic killers like this, even if they suspect someone is looking awkwardly toward them, they may simply go ahead and kill them.

FUENTES: Yes, very easily could, Wolf. And what you have to wonder about here is how well planned the escape part was once they were out of prison.

If they end up needing wheels, they won't hesitate to carjack somebody and kill them or do a home invasion, where they could get cash, weapons, and the vehicle. Killing a family in the process wouldn't faze them in the least.

BLITZER: Well, you have got to assume, if these guys, Tom, could get power tools to go in there and break through concrete, break through steel, somebody must have been waiting on the outside with civilian clothes, a vehicle, money, credit cards, or whatever to drive away.

FUENTES: You would assume that, and you wonder if there isn't more than one somebody, if they split up and had separate people taking care of each of them, taking them in different directions possibly. But, still, at some point, if they're encountered in a public

situation, they're like cornered rats. You do not want to deal with them, as Matthew said.

BLITZER: Cedric, what about this source telling CNN that a female employee at the prison who is now being questioned as a possible accomplice, she knew both of these inmates, supposedly, according to officials, very well?

Do you think there's some way this individual, assuming this individual may know something, would speak out? What would the authorities do to get -- convince this individual this woman, to talk, shall we say, assuming she was involved? And we have no reason to believe she was involved, although we have learned she's being questioned.

[18:25:08]

ALEXANDER: Well, assuming that she is involved, they're going to go through a series of questions with her based on whatever information that they have.

And there's no doubt in my mind, in that interview with her, they're going to make some determination whether she is mildly involved in this or she's very much involved in it. But whatever the case may happen to be, it's going to be through that interrogation process with her. They're going to make some determination whether she's involved. It could be others involved as well too that may be internal and/or external to that institution there.

But it is very clear and evident, I think, to all of us here, Wolf, that there's others involved in this case. And I -- it's hard to overlook the fact that someone inside that prison very well may be involved as well too.

BLITZER: The priority, Matthew, right now is to find these two guys before they can do any more damage, kill anyone else in the process, but then, after that, to learn some lessons. This is the first time in 170 years that this maximum security prison, that someone has broken out of this prison. They have got to learn what happened to make sure it never happens again.

HORACE: Well, Wolf, just like everything else in law enforcement and security, we have got to develop best practices.

And the only way we do that is to go back and examine our strengths and our weaknesses. Again, this was a failure, a security failure, on so many different levels. And I'm sure that contractors will be brought in, specialists, to examine how this happened, when it happened, and to try to make sure that it can't happen again.

BLITZER: Because if it can happen at this facility, at this prison, Tom, it could happen anywhere.

FUENTES: Well, it could. And I would like to know about the training and staffing at that prison. So many law enforcement and corrections institutions have had

severe budget cuts over the last five, 10 years. Have they had a severe cut in their staffing, where they can't do the bed checks as diligently as they used to? That's what I would want to know. What is the procedure at that prison? And do they have enough staff to actually maintain that kind of security?

BLITZER: Yes, lots of lessons they're going to have to learn from this experience. Let's hope they find these two guys and find them quickly.

Guys, thanks very, very much.

Just ahead, do U.S. intelligence officials know where the leader of ISIS is hiding out right now? We're getting new details about the new information learned during a daring raid by U.S. commandos.

And the Senate Foreign Relations Committee member, Senator Chris Murphy -- there you see him -- he is standing by live. He'll be taking our questions.

And dozens of people on terror watch lists, get this, they have been cleared to work in secure areas of airports, dozens of people on terror watch lists. They are working at airports. A government watchdog reveals new failures at the TSA. We will have details.

(COMMERCIAL BREAK)

BLITZER: We're learning new details about that daring U.S. Commando raid that took out a key ISIS leader in Syria, the leader named Abu Sayyaf.

[18:32:42] The raid provided a wealth of intelligence information. The U.S. also getting intelligence about the whereabouts of the top leader of ISIS, Abu Bakr al-Baghdadi.

Let's bring in our chief national security correspondent, Jim Sciutto. He's working the story for us. What else are you learning?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: CNN has learned that the U.S. intelligence had intelligence indicating possible locations of the ISIS leader. Several possible locations over the last several months. This U.S. official telling our own Barbara Starr, but that that information was either too late, too vague, or incomplete to allow a successful airstrike, and that's due in part to the lack of real-time intelligence from operatives on the ground. That's been a black hole in Syria for some time, which is human intelligence, known as humint, on the ground there.

We're also learning that Abu Bakr al-Baghdadi is changing the way he operates, as we often hear of ISIS leaders. He's staying in populated areas, because he knows that the U.S. will not strike there for the risk of civilian casualties. He is told -- we are told by one senior U.S. official he is very smart; he knows that we are watching.

And this is a consistent thing. You're hearing this not just about senior leadership of ISIS but also lower-level operatives. They are changing the way they communicate, using encrypted devices, et cetera, because they know that that's an easy way for the western-led coalition, the U.S.-led coalition to zero in on them.

BLITZER: And they're communicating with some other old-school ways, as well.

SCIUTTO: Their wives. Their wives. And this is partly the conclusion of the raid conducted last month by the U.S. Delta Force that killed the senior ISIS leader, Abu Sayyaf. They captured his wife in that operation. And from interrogations, they're learning a lot of information that still has to be vetted.

But it looks like that they are using their wives, in part again to adjust to U.S. surveillance, because they feel that they are less under surveillance. It's interesting. It reminds me covering Paris, the "Charlie Hebdo" attacks. The Kouachi brothers were apparently using their wives to communicate with each other, because they thought that that would be outside of the reach of French intelligence. So it's a frequent tactic they use.

BLITZER: Well, they were using their wives' cell phones.

SCIUTTO: Exactly.

BLITZER: That were listed in their wives' names. We don't know if the wives were actually texting each other or the husbands were using the wives' text -- cell phones to text.

SCIUTTO: Or using them as middle men, too, or women, to transmit those messages.

BLITZER: Jim Sciutto, thanks very much.

Let's get some more now. Joining us, a key member of the Senate Foreign Relations Committee, Chris Murphy. He's a Democrat from Connecticut.

Senator, thanks very much for joining us. What do you make of the president's comments today that the U.S. still has an incomplete strategy in dealing with the training and arming of the Iraqi military?

[18:35:06] CHRIS MURPHY, SENATE FOREIGN RELATIONS COMMITTEE: Well, I mean, let's give a little context here. We spent ten years in Iraq, trying to train up Iraqi forces to be able to defend themselves. And they essentially fled and ran when they were confronted by ISI. So we've had a long-term problem in having a legitimate capable partner on the ground in Iraq.

So I don't think it's speaking out of school for the president to admit that, without an Iraqi military that is able to seriously confront ISIS, is willing to do it in places like Ramadi and elsewhere, that we don't have a strategy that can effectively work on the ground. Nobody that I represent in Connecticut wants to put another

100,000 U.S. troops back in there, so we ultimately need the Iraqis, maybe with some partners in the region, to take control of their military future. But right now, there's a lot of holes in the Iraqi defenses. That's just the truth.

BLITZER: Because the U.S. spent a decade arming and training and spending hundreds of billions of dollars training that Iraqi military. Didn't exactly work out so great. Do you have any confidence at all in the Iraqi military right now, which is clearly Shia-led?

MURPHY: So I think you've hit the nail on the head here. Ultimately, you need for the new leader in Baghdad to reach out to Sunni constituencies to build up a component of the military that is non-Shia.

And that's what happened in Ramadi. In Ramadi, they did not stand up a Sunni military, and thus, they had no real way to defend that city. You're not going to defend a city of Sunnis with a Shia military or with a Shia-Iranian force.

And that is the other real risk here. If we don't reach out and stand up Sunnis in the Iraqi military, then we're going to be relying on Iran to do our fighting there, which is frankly almost more disastrous in the long run than any of the options we're contemplating now.

So we've got to play this hard with the Iraqis and tell them that we're not going to stake around for the next 12 months, the next 24 months if they're not willing to make their military equal parts Shia and Sunni.

BLITZER: You've been working together with others for a long time now to get formal legislation authorizing the use of U.S. military force in this war against ISIS. Based on my latest check, no legislation really has been passed. Certainly, nothing has been sent to the president to sign into law. Although he says he would sign something. What's the delay?

MURPHY: Well, I think this is hard, and a lot of my colleagues are scared about getting into the details of how we authorize a comprehensive strategy against ISIS. But it's our responsibility, our constitutional obligation as a Congress, to declare war. And we are at war with ISIS. And it is right now an extra-constitutional war. It has not been authorized by Congress. This enemy has not been named by Congress. We should get in the game. Hopefully later this week in the Foreign Relations Committee we're going to have the opportunity to debate an authorization of military force.

But there are many of us who want conditions on that authorization, specifically a prohibition on the use of ground forces. President Obama has said that he's not going to put in tens of thousands of ground troops. I believe him. But if you listen to the Republican presidential candidates like Jeb Bush and Marco Rubio, they sound like they're willing to put in major U.S. combat troops on the ground. If we authorize this war, then we should do it in a way that

abides by everything that we've learned over the last decade. Keep American ground forces out of the Middle East.

BLITZER: Because as you know, the president says he's willing to entertain new legislation, but he says he really doesn't need it. The legislation that passed after 9/11, that's good enough for him. You disagree with him on that?

MURPHY: Yes, I do disagree with the president on this. You know, ISIS is certainly a follow-on organization from al Qaeda. But they very specifically disavowed any relationship with al Qaeda. And they are formally two separate organizations. And so it is just -- I don't think it really makes sense that you can use the war we declared against al Qaeda to also cover ISIS.

If you use that logic, then essentially any terrorist group that has any historical connection with Osama bin Laden and his main organizers would be covered by that 2001 authorization.

We've got to step up and do our job here. That's what we got elected to do. And it shouldn't just be up to the executives to decide when we go to war. I actually support what the president is doing here, but I actually think my constituents should have a say in how this war is conducted.

BLITZER: Do you agree with the defense secretary, Ash Carter, that the Iraqi military, at least so far, whether in Ramadi, whether in Mosul, simply don't have a will to fight?

MURPHY: Well, very clearly, the Iraqi military broke down and fled, as ISIS started to take control of the northern parts of that country. In al Anbar province, you saw some of the same thing happen.

I understand that for the defense secretary to call out the Iraqi military looks somewhat impolitic. But those of us in Congress I think can be a little bit less diplomatic.

[18:40:07] And the reality is, is that the Iraqi military has shown an unwillingness to stand up and fight. And that is really concerning. As I said at the outset, we spent ten years training the Iraqis. And they weren't capable of fighting.

And so a lot of us are skeptical of our ability to retrain them over the course of a series of months. They ultimately have to want to do this for themselves, and they're not going to do that until they bring in the Sunni population to defend themselves, rather than just having Shia and Iranian militia groups fight to protect the Sunni population.

BLITZER: Senator Chris Murphy of Connecticut, thanks very much for joining us.

MURPHY: Thanks, Wolf.

Just ahead, a new report reveals major security lapses at the TSA. Allowing aviation workers -- get this -- who themselves are on a terror watch list to stay on the job and operate in secure areas.

Plus Caitlyn Jenner has been in the news in a big way since "Vanity Fair" put her on its cover. But Jenner also surprised some people when she told the world she's a Republican. Which GOP presidential contender is now offering his support to Jenner?

(COMMERCIAL BREAK

[18:45:46] BLITZER: Tonight, another alarming failure by the agency in charge of airport security. New government report reveals the TSA did not identify dozens, dozens of aviation workers on terror watch lists, allowing them to work in secure areas.

Our aviation correspondent Rene Marsh is joining us now.

What's going on over here, Rene?

RENE MARSH, CNN AVIATION CORRESPONDENT: Well, Wolf, tonight, the TSA is under the microscope again. This time, the agency's vetting process is being scrutinized after it missed the fact multiple airport workers had links to terrorism.

(BEGIN VIDEOTAPE)

MARSH (voice-over): Aviation workers with terror connections working at U.S. airports. The TSA in charge of vetting these employees green lighted at least 73 people with links to terrorism.

CHAD WOLF, FORMER TSA OFFICIAL: These are airport workers. So, this really speaks to the issue of the insider threat. TSA's primary way to guard against that is to make sure that these background checks are complete and they're exhaustive. And what this report says is they're not complete nor are they exhaustive.

MARSH: According to a Department of Homeland Security inspector general report, the slipup is a potential national security risk even the TSA acknowledges. "The individuals were cleared for access to secured airport areas despite representing a potential transportation security threat."

They worked for major airlines where airport vendors and other employees with unescorted access to commercial planes, the tarmac, and luggage. The misstep happened because TSA does not have complete access to every agency's terror watch list.

WOLF: This is a classic example of them not working together as they should. And so who's to blame? TSA and DHS are really at lead here.

MARSH: The fear, airport workers with terror links could facilitate an insider attack.

In a CNN investigation, Drew Griffin uncovered employees with access to airplanes and tarmacs were not screened daily. Although the agency says it ramped up random screening after a baggage handler was caught smuggling guns onto commercial planes in Atlanta. Scrutiny over TSA's vetting process comes after embarrassing news

the agency's officers failed to detect weapons and fake explosives almost every time undercover teams put them to the test.

WOLF: It points to a larger problem that TSA has in making sure that their operations are running smoothly. And it comes from leadership. And not having a leader in place for some time now I think has been detrimental to the agency.

(END VIDEOTAPE)

MARSH: Well, other problems, the inspector general found TSA was less effective in making sure aviation workers have not committed crimes that would disqualify them from having access to secure parts of the airport, and thousands of records used to vet these employees were incomplete or inaccurate. TSA says they are working to fix all of these issues.

But, Wolf, despite the weaknesses the report highlights the report also says the vetting process is generally effective in detecting links to terrorism -- Wolf.

BLITZER: Generally effective not good enough. It's got to be perfectly effective to deal in a sensitive area like this.

All right. Thanks very much, Rene, for that report.

Just ahead, a Republican rolls out the red carpet for Caitlin Jenner, welcoming her into the GOP as her "Vanity Fair" cover story hits the newsstands. Could this become a presidential campaign issue?

But, first, a preview of CNN's original series "The Seventies."

(BEGIN VIDEOTAPE)

SUBTITLE: Sound of the seventies. One nation under change.

UNIDENTIFIED MALE: The '70s awakened us and polarized us.

UNIDENTIFIED MALE: The 1970s saw the development of terrorism.

UNIDENTIFIED MALE: It was bombshell after bombshell after bombshell.

UNIDENTIFIED MALE: The Watergate scandal broke wide open today.

UNIDENTIFIED MALE: The 1970s, I think more. More hair. More naked people. More misbehavior.

UNIDENTIFIED MALE: Because of what was going on, people came home and they wanted to laugh. [18:50:01] UNIDENTIFIED MALE: I want one picture taken with

Archie Bunker and me. One, two, three.

UNIDENTIFIED MALE: It was a period of discovery for a lot of people.

UNIDENTIFIED MALE: My only defense was it was the '70s.

UNIDENTIFIED MALE: Dino-mite!

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Tonight, President Obama second guessing the United States Supreme Court while a Republican presidential candidate is welcoming Caitlyn Jenner into the Republican Party.

Let's talk about all of this and more with our chief political analyst Gloria Borger, our senior political correspondent Brianna Keilar, and our senior political analyst Ron Brownstein.

[18:55:04] At his news conference today, Ron, the president said the Supreme Court should have never even accepted this important case they have to decide between now and the end of the month involving the future of very critical measure in the Obamacare program.

BROWNSTEIN: Look, there are a lot of advocates of the law. Not only advocates who were surprised that took this case up, because until the theory was developed by the Cato Institute and some other conservative legal groups, there was no one involved in the legislation who had ever really advanced this idea that it was intended to deny the subsidies to states that use the federal exchange.

There was a recent -- a terrific reconstruction in "The New York Times" where Olympia Snowe, who is a Republican in the Senate Finance Committee, and she said, flatly, it was never part of our conversation at any point to make the distinction that is the heart of the lawsuit. I think a lot of people were surprised. But now, he is back again with this position where he needs one Republican appointed justice to agree with him, or else, there's a big hole in the Obamacare ship.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: And since when does a conservative court decide that it's going to decide the intent of congressional legislation? I mean, that's not their job. You know, I think that the president was stunned about it because he had a reason to be. I mean, if there was any confusion in Congress, let Congress figure it out. Why is this up to the court?

BLITZER: All right. Brianna, let's talk about the race for the White House on the Republican side. Scott Walker, like some other Republican presidential candidates, now leaving open the possibility sending more troops into Iraq, combat troops, boots on ground. How is this going to play in a general election? He's doing well in Iowa. BRIANNA KEILAR, CNN SENIOR POLITICAL CORRESPONDENT: Well, I

think it does -- I think Iraq does play in a general election and I think it's tricky for both sides. Scott walker in this case is basically saying, I'm not going to limit myself. I'm not go -- this is something we have heard from Republicans over the years. I'm not going to telegraph a timetable and say when I might go out or what I will or won't do. There's that.

But this is really a tricky issue. Because I think Americans want something to be done about is. They want something done. They don't want a full-scale reinvasion. They are open to having some American troops there, trainers and advisors, as we can see.

On the Democratic side, I think what Democrats would want to say is the U.S. shouldn't have been there in the first place. Hillary Clinton, while she said it was a mistake, she can't necessarily --

BLITZER: Gloria, how important is Iraq in this race?

BORGER: I think it's very important. Look, the more the president comes out and says as did he today that there's no strategy, you know, to combat ISIS, the more Republicans are going to say, you know what, we have got a strategy.

Now, Walker is not the farthest to the right on this in terms of boots on the ground. You have Lindsey Graham saying he would send 10,000 combat troops.

So, I think all the Republicans are trying to position themselves in a way where they can say actually, we have a way to deal with it.

BROWNSTEIN: And what makes this complicated is that most Americans believe the Obama strategy and approach on Iraq and ISIS have failed. But they also believe the Bush strategy on Iraq failed.

KEILAR: And that's -- yes --

BROWNSTEIN: The trump card for Democrats is to say, do you really want to go back to that? When you polled on this recently, CNN/ORC, when asked whose fault was Iraq was such a mess, it was evenly divided by Bush policy and the Obama policy.

SEN. LINDSEY GRAHAM (R-SC), PRESIDENTIAL CANDIDATE: If Caitlyn Jenner wants to be safe and have a prosperous economy, vote for me. I'm into addition.

I haven't walked in her shoes. I don't have all the answers to the mysteries of life. I can only imagine the torment that Bruce Jenner went through. I hope she has found peace. I'm a pro-life, traditional marriage kind of guy. But I'm

running to be president of the United States. If Caitlyn Jenner wants to be a Republican, she is welcome in my party.

(END VIDEO CLIP)

BLITZER: All right. What do you think?

BORGER: Coming from Lindsey Graham who is kind of a maverick, unpredictable, understands that the Republican Party has to grow in its appeal to younger voters, all kinds of voters, it didn't really -- it didn't really surprise me. I think he is somebody who has always said Republicans have to learn how to talk to women better. They have to learn how to broaden out.

KEILAR: I'm into addition, right?

BORGER: He needs to a lot.

KEILAR: Yes.

BROWNSTEIN: That was striking how forthrightly he said that. The biggest hurdle facing Republicans in 2016 is cultural affinity and the sense that more the Democrats have more groups that they share cultural values. This one, a reversal of our politics in the '70s and '80s, but a real challenge for Republicans.

KEILAR: And it just shows that he is saying, I think what a lot of people are saying, what a lot of Republicans believe, they need to broaden certainly their acceptance of the LGBT community.

BORGER: You know, and don't forget, this is a senator from conservative senator from conservative South Carolina.

BLITZER: We've got to leave it on that note, guys. We'll continue these conversations. That's it for me.